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bonnie-sc-techse
May 27, 2021 4:50 AM UTC
Question

I need to know whether I should be reporting our purchases as COGS or just as an expense.

When we purchase items to sell to our customers, we purchase as needed. We do not keep any stock on hand. So when we make a purchase I categorize it just as an expense. Should this be COGS or just expense?

1 reply

Rustler
Rustler
May 27, 2021 11:08 AM UTC

When you file taxes, COGS is related to the cost of the items in inventory that you sold.

 

Ideally I would set up a new COGS type account called COS, cost of sales, in the chart of accounts.  use that account for anything you buy for the customer

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